Purshottam Vishandas Raheja vs Shrichand Vishandas Raheja

(Arising out of Special Leave Petition (C) No. 26974 of 2010)

Purshottam Vishandas Raheja and another ...Appellants

Versus

Shrichand Vishandas Raheja (D) through Lrs. and others ...Respondents

J U D G M E N T

Gokhale J.

Leave granted.

2. This appeal by special leave by original Defendants Nos. 1

and 2 seeks to challenge the Judgment and Order dated 12.8.2010

passed by a Division Bench of the Bombay High Court allowing the

Appeal No. 550/2009 against the order of a Single Judge dated

9.9.2009 in Notice of Motion No. 1787/2009 in Suit No. 1266/2009

filed by Respondent No. 1 (since deceased). The learned Single Judge

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had granted a limited relief to Respondent No. 1 (original plaintiff)

whereas by the Order passed by the Division Bench the Notice of

Motion taken up by the original Plaintiff had been made absolute in

terms of prayers (a), (b) and (c), and thereby granting full interim

relief which was sought by Respondent No. 1 herein.

3. In view of the demise of Respondent No. 1, the heirs of

Respondent No. 1 have come on record of the appeal. Their case is

that the interim relief as was sought, though in the nature of

mandatory relief, was necessary in the facts and circumstances of the

case. As against that, the submission on behalf of the Appellants is

that the learned Single Judge had exercised his discretion

appropriately and there was no reason for the Division Bench to

interfere therein. The Appellants also contend that the prayers in the

Notice of Motion are the principal prayers in the plaint and, therefore,

it amounts to granting a decree at the interlocutory stage which was

not justified in the present case.

4. The question for determination, therefore, is as to

whether, in the facts and circumstances of the case, the mandatory

order as passed by the Division Bench was justified, or whether the

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learned Single Judge having exercised his discretion appropriately, the

Division Bench erred in interfering therein?

5. The facts leading to this appeal are as follows:

Respondent No.1 (the original Plaintiff) is the elder brother

of Petitioner No.1 (Defendant No.1 in the Suit). Petitioner No.2 is the

son of Petitioner No.1. The dispute between them is about the rights to

a property which is being developed and is situated at Cadastral

Survey No. 764, Mazgaon Division in Mumbai. The case of Respondent

No.1 is that he is the exclusive owner of that property whereas the

Appellants very much dispute the same. It is the case of Respondent

No.1 that by Conveyance Deed dated 27.3.1981 as rectified by

Rectification Deed dated 11.9.1986, he had purchased the property

from the original owners and necessary property entries are in his

name. It is his case that he has taken steps to develop that property

under the Development Control Rules by removing one old bungalow

and several chawls situated thereon. Two buildings have already been

put up on that property and the third one now named as `Siddhagiri' is

under construction.

6. It is his further case that since 1999, he has not been

keeping well, and therefore, he executed three Powers of Attorney

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from time to time. The first one was executed on 8.8.2000 in favour of

his wife and Appellant No.1 which was for performing various acts and

deeds on his behalf as his Constituted Attorneys in furtherance of this

project. He executed second Power of Attorney on 21.9.2005 again in

favour of his wife and Appellant No.1 as well as Appellant No.2 which

is also in the similar fashion as the first one. The third Power of

Attorney was executed on 24.10.2000 which is a specific power in

favour of Appellant No.1 for giving evidence on behalf of the

Respondent No.1. It was his further case that though there was one

Joint Account with Appellant No.1 in Indian Bank since 1993, one more

Joint Account was opened on 10.10.2001, this time in HSBC Bank

which was particularly for carrying the transactions relating to the

property and developments thereon. It was his case that all amounts

deposited in that account belong to him. He opened one more Joint

Account on 1.2.2008 in the State Bank of India with the Appellant

which was stated to be opened for payment of taxes etc. relating to

the property.

7. It is the case of Respondent No.1 that from time to time

Appellant No. 1 surreptitiously withdrew amounts that were lying with

the HSBC bank totalling to One Crore Forty Lakhs and invested in Birla

Sun Life Mutual Funds. The Appellant No. 1 had suggested this

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investment to him which he had declined, and thereafter unilaterally

this account was shifted. On Respondent No.1's protest, the

investments in mutual funds were redeemed and substantial amount

came back into the account. However, an amount of about Rs. 6.9

lakhs was lost as it could not be redeemed. In view of this

development, he lost confidence in his brother and therefore served a

notice dated on 2.3.2009 on the Appellants, revoking all the three

Powers of Attorney. He called upon both the Appellants to desist from

acting on the basis of these Powers of Attorney. He called upon them

further to return the title deeds of the property, and render the

accounts, and informed them that he had appointed one Yogesh

Jadhav as the Project Manager and asked the Appellants to acquaint

him with various contractors as also the position of work and balance

of payment to be made. He lastly called upon the Appellants not to

operate the account with Indian Bank as well as with the HSBC bank

and return all the bank papers.

8. Appellant No.1 thereafter wrote to the Manager of the

Indian Bank on 24.4.2009 pointing out that the account with their

bank was initially in the joint names of his father and himself and

subsequently on the demise of his father; the first Respondent had

been joined into that account. According to the first Appellant, he

alone was entitled to operate the account and removal of an amount of

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Rs. 65,500/- from that account by the first Respondent was illegal. He

asked the bankers to ignore first Respondent's earlier letter dated

9.3.2009 addressed to the bank. This was followed by a detailed reply

by the first Appellant to the first Respondent dated 12.5.2009 wherein

it was specifically pleaded that the Powers of Attorney were executed

for valid consideration and the same were coupled with interest in the

concerned property. Thereafter, he pointed out that although the

property stood in the name of first Respondent, as per the family

settlement which took place on 30.1.1992, two flats on the 15th floor

of "Arihant Tower" (first building developed) together with terrace, one

shop, one room and six chawls together with land appurtenant thereto

and interest therein were allotted to him and his father. He specifically

pleaded that the Powers of Attorney were executed to enable him and

his son to develop those properties. He pointed out that Respondent

No.1 was the legal heir to the extent of only one fifth share of his

father's fifty percent (50%) share at the time of his demise, i.e. ten

percent (10%) only.

9. Thereafter, it was specifically pleaded that after the demise

of their father in the year 1994, the first Appellant started work on the

property to get the No-Objection Certificate from the government

authorities, spent good amount and time on the construction, provided

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initially temporary accommodation, and thereafter permanent

accommodation to the occupants of the shops and chawls, developed

the property by spending crores of rupees. He, inter alia, coordinated

with the architects, took steps to obtain permissions and No-Objection

Certificates (NOCs) from the Housing Board and the Municipal

authorities and attended court matters. He further pointed out that

since Respondent No.1 had failed to effect the necessary transfers of

various properties, discussions took place with the assistance of

lawyers for an understanding, and in spite of that he was making a

dishonest claim on the property knowing fully well what had come to

his share, viz. only ten percent (10%) of the property. He further

pointed out that he had a larger counter-claim running into crores of

rupees against Respondent No.1, and that the entire property was in

his exclusive possession for several years and there was no question of

appointing anyone else as Project Manager. With respect to the bank

account, he specifically pointed out that the bank account was being

operated by him in his own independent right and the Respondent

could not order him to refrain from operating the said account.

10. This led to the first Respondent to file the above

mentioned suit against the appellants. The Indian Bank, Hong Kong &

Shanghai Banking Corporation (HSBC Bank) and the State Bank of

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India were joined as defendants No.3 to 5 respectively. The three

principal prayers in the suit were as follows:

"[a] Defendant Nos. 1 and 2 and their servants and agents

be restrained by a permanent order and injunction of this

Hon'ble Court from in any manner directly or indirectly acting

or holding themselves out as Attorneys or Agents of the

Plaintiff or dealing with any of the properties or businesses of

the Plaintiff, including property bearing Cadastral Survey

No.764 of Mazgaon Division situate at 119, Chinchpokali Cross

Lane, Byculla, Mumbai 400 027 described in Exhibit - A-3

hereto or any premises thereon or under construction thereon

or any part thereof;

[b] Defendant Nos. 1 and 2 and their servants and agents

be restrained by a permanent order and injunction of this

Hon'ble Court from in any manner directly or indirectly

entering upon property bearing Cadastral Survey No.764 of

Mazgaon Division situate at 119, Chinchpokali Cross Lane,

Byculla, Mumbai 400 027 described in Exhibit - A-3 hereto or

any premises thereon or under construction thereon or any

part thereof;

[c] Defendant Nos. 1 and 2 and their servants and agents

be ordered and decreed to deliver to the Plaintiff documents

listed in Exhibit - U hereto and all other documents,

correspondence and records belonging to the Plaintiff in the

possession or power of Defendant No.1 or Defendant No.2."

The Notice of Motion taken out in the Suit had the following prayers:

"(a) that pending the hearing and final disposal of the Suit,

Defendant Nos. 1and 2 and their servants and agents be

restrained by interim orders and injunctions of this Hon'ble

Court from in any manner, directly or indirectly.

(i)Acting or holding themselves out as Attorneys or

Agents of the Appellant or dealing with any of the

properties or businesses of the Plaintiff, including

property bearing Cadastral Survey No.764 of

Mazgaon Division situate at 119, Chinchpokali Cross

Lane, Byculla, Mumbai 400 027 described in Exhibit

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"A-3" to the Plaint or any premises thereon or

under construction thereon or any part thereof;

(ii) entering upon property bearing Cadastral Survey

No.764 of Mazgaon Division situate at 119,

Chinchpokali Cross Lane, Byculla, Mumbai 400 027

described in Exhibit "A-3" to the Plaint or any

premises thereon or under construction thereon or

any part thereof;

(iii) operating or signing any Cheques on or giving any

instructions relating to or withdrawing any

amounts form Account No. 417627508 in the joint

names of the Plaintiff and Defendant No.1 with

Defendant No. 3.

(iv) operating or signing any Cheques on or giving any

instructions relating to or withdrawing any

amounts from Account No. 002-236586-006 in the

joint names of the Plaintiff and Defendant No.1 with

Defendant No. 4.

(v) operating or signing any Cheques on or giving any

instructions relating to or withdrawing any

amounts from Account No. 20006421901 in the

joint names of the Plaintiff and Defendant No.1 with

Defendant No. 5.

(b) that pending the hearing and final disposal of the Suit,

Defendant Nos.1 and 2 and their servants and agents be directed by

an interim order and injunction of this Hon'ble Court to deliver to the

Plaintiff documents listed in Exhibit "U" to the Plaint and all other

documents, correspondence and records belonging to the Plaintiff in

the possession or power of Defendant No.1 or Defendant No.2

(c) that pending admission, hearing and final disposal of the Suit;

(i) Defendant No.3 and their servants and agents be

restrained by an order and injunction of this Hon'ble Court

from honouring any Cheques signed by Defendant No.1 on

or acting on any instructions given by Defendant No.1

relating to Account No.417627508 with Respondent No. 3

permitting any withdrawal of amounts by Defendant No.1

from Account No.417627508 with Defendant No. 3;

(ii) Defendant No.4 and their servants and agents be

restrained by an order and injunction of this Hon'ble Court

from honouring any Cheques signed by Defendant No.1 on

or acting on any instructions given by Defendant No.1

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relating to Account No.002-236586-006 with Defendant No.

4 permitting any withdrawal of amounts by Defendant No.1

from Account No. 002-236586-006 with Defendant No. 4;

(iii) Defendant No.5 and their servants and agents be

restrained by an order and injunction of this Hon'ble Court

from honouring any Cheques signed by Defendant No.1 on

or acting on any instructions given by Defendant No.1

relating to Account No.20006421901 with Defendant No. 5

permitting any withdrawal of amounts by Respondent No.1

from Account No. 20006421901 with Defendant No. 5;"

11. Respondent No.1 filed affidavit in support containing the

same submissions as above whereas the Appellant filed a reply based

on the letters which have been pointed out above. Thereafter, further

affidavits from both the parties were filed. Two sisters of the two

brothers have filed their joint affidavit in this Motion supporting the

contention raised by Appellants herein that there was a family

settlement on 30.01.1992 and as per the terms of the settlement, the

Byculla property came to Appellant No.1 and their father, and some

other properties were given to Respondent No.1. They also supported

the submission of the Appellants that only on the demise of their

father, the Respondent No.1 can claim ten percent (10%) share in that

property and nothing more.

12. In view of these pleadings when this matter was heard

before the learned Single Judge, he formed an opinion that it was not

possible to hold at that stage whether the documents of powers of

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attorney were merely powers simpliciter given by the owner of the

property, or whether they contained agency coupled with interest as

contended by the Appellants herein. The Appellants had pointed out

that although the property was purchased in the name of Respondent

No.1, almost ninety percent of the amount for the purchase was

contributed by Appellant No. 1. Besides this, the joint account in

Indian Bank was opened way back in the year 1993 and the amount

realized from the sale of the flats was being deposited therein. He was

the person on the spot dealing with that property and only on the

basis of the fact that the document of title stood in the name of the

first Respondent the interim order as sought could not have been

granted. The plea of the Appellants had to be examined particularly

when their sisters were supporting the Appellants with respect to

family settlement which was allegedly arrived at when their father was

alive. Granting of the interim order as prayed would have meant that

the Appellants will be required to withdraw themselves from the

concerned property. They will be restrained from entering into that

property or holding out as the attorneys of Respondent No.1

concerning that property. The Order by the learned Single Judge also

records that with respect to the stage of the construction it was the

counsel for the Appellants who placed the facts before the Court on

instructions that the construction was nearly complete, payments to

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various agencies had been made by the first Appellant and at this

belated stage if any interim order was passed it would not only be

inconvenient to Appellants, but also to the purchasers of the flats and

other third parties.

13. The grant of interim order would mean discontinuance of

the scenario on the spot as it existed at that point of time. Hence, the

prayers restraining the Appellants as attorneys or agents of first

Respondent or restraining them from entering into the property could

not be granted. As far as the prayer for the return of the documents in

possession of the Appellants was concerned, the learned Judge noted

that it was not possible to issue final orders with regard to them. He,

however, recorded that appellants had agreed to forward photocopies

of those documents to Respondent No.1. The learned judge held that

no prima facie case for a mandatory injunction was made out, yet in

paragraph 22 of his order, he granted a limited interim order which

reads as follows:

"22. For the aforesaid reasons, it is held that no prima

facie case is made out by the plaintiff and considering that

the development and construction work has progressed to a

substantial extent and only some finishing works are

remaining so also 23 flats have been already sold, interest of

justice would be sub-served if it is directed that the

development and construction work can be completed at site.

The flats can be sold on the basis of the documents executed

but all sale proceeds must be deposited in the concerned

joint bank account alone. The joint bank account would be

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allowed to be operated only to the extent of paying off the

liabilities insofar as the suit property and its development,

which shall include payment to contractors and other agents.

However, such payment shall be made only on production of

necessary proof and it is only thereafter the first defendant

can release the sums from this joint account in favour of the

contractors/agents/third parties. Needless to state that the

payment for the works which have been carried out through

any contractors, sub-contractors, agents would be made only

upon the Architect of the project certifying the said works

and issuing the necessary and relevant certificates to certify

the completion thereof. Apart from paying off these monies,

the bank account shall not be utilized by the first defendant

for any other purposes. The monies received from the sale of

23 flats are stated to be deposited in the said joint account

by the Plaintiff.

The documents are signed in favour of third parties by

either the plaintiff or plaintiff's daughter. As far as balance

27 flats are concerned, it would be open to both sides to

negotiate with prospective buyers with necessary intimation

to each of them. It would also be open for the first

defendant to forward the offers for consideration to the

plaintiff and vice versa. All documents in favour of such

purchasers shall be signed by the plaintiff and/or his

daughters Laxmi and Sangita. However, this entire

arrangement is without prejudice to the rights and

contentions of both sides. The plaintiff should furnish details

of all the offers received and agreements which are entered

into by him to the first defendant so as to enable first

defendant to verify the particulars thereof. It is only after

the offers are intimated in writing that the plaintiff can

conclude the transactions and not otherwise."

14. Being aggrieved by that limited order and seeking full

interim relief, Respondent No. 1 filed an appeal to the Division Bench.

The learned Judges of the Division Bench were impressed by the fact

that the conveyance of the property was in the name of the

Respondent and the flats were being sold in his name. Though the

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learned Judges noted that the explanation given by the Respondent

No.1 about opening of the joint account in the year 1993 was not

satisfactory, they emphasized the fact that in the Powers of Attorney

there was no reference to the family arrangement. They also posed

the question that if the Appellants had developed the property why

there was no reference to those dealings in their tax returns. They,

however, noted the fact that Respondent No.1 had not enough money

to purchase the property in the year 1991 (though he contends that he

had taken the money as loan from Appellant No.1). In view of these

factors, they were persuaded by the fact that the Powers of Attorney

had been revoked and in fact two flats which were supposed to be

given to Appellant No. 1 were sold by the first Respondent in the year

1993. The Division Bench, therefore, was of the view that a strong

prima facie case was made out and an interim order will have to be

granted. Being aggrieved by this order, the present appeal has been

filed.

15. The submission on behalf of the Appellant is that the

totality of circumstances have got to be seen and the factum of family

settlement along with the contribution to the purchase of the property

by Appellant No.1 has to be given due weightage. It was also

submitted on their behalf that the Appellants are the persons on the

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spot and they are developing the property and none of the

Respondents are available there. The flats are undoubtedly sold in the

name of the first Respondent because the property stands in his name.

In any case, it is submitted that the nature of powers under

documents have got to be examined on evidence with respect to the

family settlement and the Appellants cannot be non-suited at the

Motion stage when it was a family dispute and particularly when the

sisters who were parties to the family settlement were supporting the

submission of the Appellant. The Respondent, on the other hand,

submitted that this was a fit case to grant the interim mandatory order

as was granted by the Division Bench. The property belonged to the

Respondent and it is only because he was not well that the Appellants

carried out the development thereon. Now, they are taking advantage

of the situation.

16. We have noted the submissions of both parties. The

question which comes up for our consideration is whether the learned

Single Judge exercised his discretion in such an arbitrary or perverse

manner that the Appellate Court ought to have interfered with it? The

Learned Single Judge has passed a detailed order explaining as to why

he was constrained to grant only the limited interim relief. It was in

the interest of both the parties as well as the flat purchasers. The

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Order passed by the learned Single Judge is also on the basis that

anything beyond the limited protection given at that stage would deny

the opportunity to the Appellants to establish their case at the trial

when it is not in dispute that Appellant No.1 contributed ninety percent

of the purchase money to the property and he took steps all

throughout to develop the property. Undoubtedly, there are many

inconsistencies in the stories that are put up by both the parties, and

an interlocutory stage is not the one where one can reach at a definite

conclusion one way or the other, particularly where the fact situation is

as above and it would result into non-suiting one party.

17. As stated above, the question comes up as to whether the

order passed by the Division Bench was necessary. Mr. Nariman,

learned counsel appearing for the Respondents, relied upon the

Judgment of this Court in Dorab Cawasji Warden v. Coomi Warden

[(1990) 2 SCC 117] in support.

18. As far as this judgment is concerned, it must be noted that

it was a suit by one joint owner of an undivided family house to

restrain the other joint owners/their heirs from transferring their share

of the house and from parting with possession to a third

party/purchaser and restraining the purchaser from entering into and

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or remaining into possession of the suit property. This was on the

basis of the mandate of Section 44 of the Transfer of Property Act and

particularly its proviso. This Court went into the question as to

whether interlocutory injunction of a mandatory character as against

the prohibitory injunction could be granted? The counsel for the

Respondents pointed out that the mandatory injunctions were

essential to avoid greater risk of injustice being caused as held in

Films Rover International Ltd. v. Cannon Film Sales Ltd. [(1986)

3 All ER 87]. There is no difficulty in accepting that this Court did

accept that test. It, however, laid down the law in that behalf in

paragraphs 16 and 17 as follows:

"16. The relief of interlocutory mandatory injunctions

are thus granted generally to preserve or restore the status

quo of the last non-contested status which preceded the

pending controversy until the final hearing when full relief

may be granted or to compel the undoing of those acts that

have been illegally done or the restoration of that which was

wrongfully taken from the party complaining. But since the

granting of such an injunction to a party who fails or would

fail to establish his right at the trial may cause great injustice

or irreparable harm to the party against whom it was granted

or alternatively not granting of it to a party who succeeds or

would succeed may equally cause great injustice or

irreparable harm, courts have evolved certain guidelines.

Generally stated these guidelines are:

(1) The plaintiff has a strong case for trial. That is, it

shall be of a higher standard than a prima facie

case that is normally required for a prohibitory

injunction.

(2) It is necessary to prevent irreparable or serious

injury which normally cannot be compensated in

terms of money.

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(3) The balance of convenience is in favour of the

one seeking such relief.

17. Being essentially an equitably relief the grant or

refusal of an interlocutory mandatory injunction shall

ultimately rest in the sound judicial discretion of the court to

be exercised in the light of the facts and circumstances in

each case. Though the above guidelines are neither

exhaustive nor complete or absolute rules, and there may be

exceptional circumstances needing action, applying them as

prerequisite for the grant or refusal of such injunctions would

be a sound exercise of a judicial discretion."

19. In Metro Marins and another v. Bonus Watch Co. (P) Ltd.

and others [reported in (2004) 7 SCC 478], the Respondent had filed

a suit for possession contending that the license of the Appellant to the

suit property had expired. The Respondent had prayed for a judgment

on admission and alternatively an injunction directing the Appellant to

immediately hand over vacant and peaceful possession of the suit

property. The learned Single Judge of the Calcutta High Court who

heard the interlocutory application, came to the conclusion that he did

not find any reason to pass such an order in view of the fact that the

suit was still pending and granting of such relief would tantamount to a

decree before trial. The Appellate Bench, however, re-examined the

facts and observed that the litigation to be a luxury litigation directed

the Receiver to put the Respondent/Plaintiff in possession. In the

appeal to this Court, the learned counsel for the Appellants pointed out

that the Appellants were very much in possession of the premises and

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the order passed by the Division Bench was contrary to the law laid

down in Dorab Cawasji Warden (Supra). The counsel for the

Respondents, on the other hand, defended the order of the Division

Bench by contending that the period of license having come to an end,

mandatory injunction passed by the Division Bench was justified. A

Bench of Three Judges of this Court allowed the appeal and explained

the proposition in Dorab Cawasji Warden (Supra) as follows in

paragraph 9:

"9. Having considered the arguments of the learned

counsel for the parties and having perused the documents

produced, we are satisfied that the impugned order of the

appellate court cannot be sustained either on facts or in law.

As noticed by this Court, in the case of Dorab Cawasji

Warden v. Coomi Sorab Warden it has held that an interim

mandatory injunction can be granted only in exceptional

cases coming within the exceptions noticed in the said

judgment. In our opinion, the case of the respondent herein

does not come under any one of those exceptions and even

on facts it is not such a case which calls for the issuance of

an interim mandatory injunction directing the possession

being handed over to the respondent."

20. In Kishore Kumar Khaitan and another vs. Praveen

Kumar Singh [reported in (2006) 3 SCC 312], this Court once again

reiterated the principles with respect to the interim mandatory

injunction in paragraph 6 in the following words:

"6. An interim mandatory injunction is not a remedy

that is easily granted. It is an order that is passed only in

circumstances which are clear and the prima facie materials

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clearly justify a finding that the status quo has been altered

by one of the parties to the litigation and the interests of

justice demanded that the status quo ante be restored by

way of an interim mandatory injunction."

21. In our view, the learned Single Judge has considered all the

relevant aspects of the matter and thereafter passed the limited

interim order whereby documents for sale of the flats will continue to

be signed by the Respondents, though, the monies coming into the

bank account thereafter will be utilized only for the purposes that are

necessary, as stated in paragraph 22 extracted above. The appellants

have not been directed to be removed from the property inasmuch as

they were the people on the spot carrying on the development prior to

filing of the suit. The order sought by the respondents, if granted,

would mean granting all the reliefs and a sort of pre-trial decree

without the opportunity to the Appellants to have their plea examined

with respect to the family arrangement, which plea is supported by

their sisters.

22. The test to be applied to assess the correctness of the

order of the learned Single Judge would be whether the order is so

arbitrary, capricious or perverse that it should be interfered at an

interlocutory stage in an intra-Court appeal. In Wander Ltd. and

another vs. Antox India P.Ltd. [reported in 1990 (Supp) SCC 727],

a bench of Three Judges of this Court has laid down the law in this

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respect which has been consistently followed. In that matter,

Appellant No.1 being the registered proprietor of a Trade Mark had

entered into an agreement with the Respondent permitting it to

manufacture certain pharmaceutical product. On the basis of that

arrangement, the respondent applied for the requisite license from the

authorities concerned. In view the dispute between the parties, the

Appellant called upon the Respondent to stop manufacturing the

particular product, and entered into an arrangement with another

company. The Respondent filed a suit and sought a temporary

injunction to restrain the Appellant and its new nominee-company

from manufacturing the products concerned. This was on the basis of

continued user in respect of the Trade Mark of the product by the

Respondent. It was contended that user was in his own right. A

learned Single Judge of the High Court declined to grant the interim

injunction which was granted in appeal by the Appellate Bench of

Madras High Court. This Court, in its judgment, held that the

Appellate Bench had erred firstly, in misdirecting with respect to the

nature of its powers in appeal and secondly, in basing its judgment on

the alleged user of the Trade Mark. A bench of Three Judge of this

Court laid down the law in this behalf in paragraph 14 of the judgment

which is as follows:

"14. The appeals before the Division Bench were

against the exercise of discretion by the Single Judge. In

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such appeals, the appellate court will not interfere with the

exercise of discretion of the court of first instance and

substitute its own discretion except where the discretion has

been shown to have been exercised arbitrarily, or capriciously

or perversely or where the court had ignored the settled

principles of law regulating grant or refusal of interlocutory

injunctions. An appeal against exercise of discretion is said

to be an appeal on principle. Appellate court will not

reassess the material and seek to reach a conclusion different

from the one reached by the court below if the one reached

by that court was reasonably possible on the material. The

appellate court would normally not be justified in interfering

with the exercise of discretion under appeal solely on the

ground that if it had considered the matter at the trial stage

it would have come to a contrary conclusion. If the discretion

has been exercised by the trial court reasonably and in a

judicial manner the fact that the appellate court would have

taken a different view may not justify interference with the

trial court's exercise of discretion. After referring to these

principles Gajendragadkar, J. in Printers (Mysore) Private Ltd.

v. Pothan Joseph. (1960) 3 SCR 713

....These principles are well established, but as has

been observed by Viscount Simon in Charles Osenton & Co.

v. Jhanaton'... the law as to the reversal by a court of appeal

of an order made by a judge below in the exercise of his

discretion is well established, and any difficulty that arises is

due only to the application of well settled principles in an

individual case'.

The appellate judgment does not seem to defer to this

principle."

It is to be noted that the proposition laid down has been

consistently followed thereafter.

23. For the reasons stated above, in our view, the present

case, is not one where mandatory interim injunction, as sought by the

Respondents was justified. The learned Single Judge had passed a

reasoned order, and, in no way, it could be said that he had exercised

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the discretion in an arbitrary, capricious or perverse manner, or had

ignored the settled principles of law regarding grant or refusal of

interlocutory injunction. There was no reason for the Appellate Bench

to interfere and set aside that order.

24. This appeal is, therefore, allowed. The order passed by the

Division Bench is set aside and that of the learned Single Judge is

restored. We make it clear that we have not made any observations

on the merits of the rival claims of the Appellants as well as the

Respondents. We have confined ourselves only with respect to the

question as to what should be the interlocutory arrangement in the

facts and circumstances of the present case. In our view, the order

passed by the learned Single Judge was well reasoned and justified in

that context.

In the facts of the case, the parties will bear their own costs.

......................................J.

[ P.Sathasivam]

......................................J.

[ H.L. Gokhale ]

New Delhi

May 6, 2011.